BOSAL IS one of Europe's largest privately owned component companies, with 7,000 employees worldwide and 1997 sales of about DM1.2 billion ($660 million). The company is a leading independent manufacturer of exhaust systems, roofbars and towbars. Exhausts account for over 70 percent of sales.
Ad Ham, group marketing director, was interviewed by reporter Edmund Chew.
How is business developing?
Very well. 1997 was a very good year for the aftermarket and for Bosal as a whole. We had growth of over 20 percent. We acquired a company in Mexico, and one in Turkey. We started production on a couple of new OEM contracts.
What about price pressure from carmakers?
There's pressure on the price. But it's not just, let's say, imposed pricing, but a real joint effort between the car company and the suppliers to reduce the price, like with Renault's Synergie 500. It is a continuous discussion about what can be improved in design, in specification, in process.
There are the important projects going on in the car industry to make the total product, the car, more economic and to improve the performance. The game has changed into a much better cooperation and focus on what can be improved.
How are carmakers' requirements changing, especially in terms of modules?
That's become a reality more and more. Now it has become the responsibility for one Tier 1 supplier to organize the complete technical system from the engine through to the end of the exhaust pipe. That includes a new product like the manifold which combines with the catalytic converter, so you get the catalytic converter closer to the engine in order to meet future emissions requirements.
The focus is on lighter systems. We have projects going on for new vehicles where we've made some breakthroughs in the reduction of weight - we're talking about kilograms here instead of grams.
How is that achieved?
It's a different way of looking at the exhaust system. We expect to show the exhaust system on a concept car of one of the car companies in the middle of 1998.
What else is changing in the original equipment business?
Not only the very large car companies are moving, but also companies like Renault and Peugeot. That means there's more opportunity to get synergy from investment if you invest for more companies at once, for instance in Brazil, Argentina or in Mexico or in Southeast Asia.
What does that mean for your business?
We're in a good position because we're not established everywhere. For us it's an opportunity to put our new plants where we need them to support the car plants.
We built our third plant in the USA at the end of last year in Warren, Michigan. It is a dedicated plant to supply systems directly to a number of GM plants near Detroit.
In February we're opening a plant in the Czech Republic for exhaust systems, both OEM and aftermarket. We are in the process of doubling the plant in Canada, mostly for foreign companies such as Honda and Mazda.
Are you going to Southeast Asia?
I can't discuss the details but we will be in Thailand.
What opportunities are there in eastern Europe?
All the car companies are building plants in Poland, Hungary and so on. We're doing the same. It's very fast growing, a promising market.
Have you changed the resources allocated to r&d?
In Europe, North America and South Africa there are about 250 people in r&d, in advanced development and application development. Five years ago we had about 170.
What is the outlook?
The players that ware big will become bigger and the smaller players will get out or become niche players.
What you see happening now in Europe is really a development that we saw many years ago in America: large groups, far larger and more concentrated than in Europe.
Europe is increasingly becoming one market and the development of a single European currency will accelerate this process and result in a more harmonized marketplace.